Coronavirus conversations: Simon Doyle of Concha y Toro

Chilean wine giant Concha y Toro’s UK general manager talks to db about having to adapt during the Covid-19 crisis and the importance of continuing to invest in marketing.

How is business during this tricky time?

In general, we have been fortunate. The majority of our business is in off-trade channels, so our main focus has been in maintaining availability and mitigating any disruptions to supply.

How have you adapted the way you do business during the coronavirus crisis?

Operationally the main adaptation has been the whole team here (and for a large part in Chile) working remotely and communicating online. I’m pleased to say the UK team has responded brilliantly to this unprecedented situation.

Have you noticed the crisis has changed drinking habits and consumption trends?

Shopping trends definitely – though grocery and impulse sales have grown, shoppers have less time to browse, so they are gravitating towards familiar brands and products. The average spend per bottle has increased, but there are signs of polarisation.

Many consumers (possibly as they are not able to spend outside the home) are moving into more premium wine sales. On the other hand, there have been noticeable increases at entry level and bag-in-box wines too.

How do you think the coronavirus crisis will change the world?

We can be sure that there will be long-term implications and that many things will not return as before. Hopefully this crisis has also stimulated a period of reflection, so we can all find some good out of this.

Showing more respect to key workers and experts; reducing overall consumption including travel; thinking more about the sustainability of what we eat and drink, and embracing technology that addresses some of the wider environmental challenges this world faces.

How should the wine trade adapt in the face of the crisis?

This very much depends on where your business focus is. If you can remain operational, then focusing on fundamentals of your core business in a crisis is essential. Covid-19 has been devastating to on trade-focused drinks companies. In most cases these are well-managed businesses and enterprises that have found themselves with their livelihoods at risk through no fault of their own.

Do you think it will change how people do business, if so how?

Across the board, most businesses will be considering contingencies for something like this happening again, so ongoing sustainability in the face of sudden change will become more of a strategic priority. In the on trade, I suspect that the good retail and supply operators able to survive this will be more focused on adding value and differentiation, with less emphasis on price fighting.

What is the future for the wine trade post Covid-19?

Even the most optimistic recognise that the medium term will be tough, especially for the hospitality sector, where the impacts of Covid-19 will be severe. There are a number of further challenges coming down the track that the whole UK wine trade will need to navigate. A no-deal Brexit combined with the government’s alcohol policy review have the potential to do further damage to a trade that is already under siege.

Sadly, it is likely there will be many unable to weather these storms and all businesses will need to review what is sustainable and what is not. Regardless of such seismic change, it is clear that margins across the industry are not sustainable for producers, distributors or retailers. So I hope that a positive outcome of all of this will be a realisation that it is necessary for all to find and add more value across the supply chain, so that businesses are able to offer customers a fair deal, while also being able to safeguard against future challenges

What are your top priorities as a company going forward?

Our focus is on building and distributing high quality wine brands that add value to consumers and to the wine category. Our strategies for achieving this will adapt over time, but the fundamentals will remain.

Do you have any new wines in the pipeline?

We are very excited about our new Cono Sur Organics range and expanding the Diablo offering – we will be revealing more news on this very soon. Our leading Argentine brand Trivento is also on terrestrial TV, which is a major milestone for us, and demonstrates the importance of continuing to invest, where you can, in times of uncertainty.